Nifty seen opening higher; Axis Bank eyed

NEW DELHI: The 50-share Nifty index is expected to open higher on Tuesday after lower International Monetary Fund (IMF) global growth forecast raised hopes of more stimulus measures from central banks.

Axis Bank Ltd will be in focus ahead of its quarterly results which will be out later today. According to ET Now poll, the bank is expected to report a net profit of Rs 1140.30 crore for the quarter ended June 2012, up 21 percent, compared to a net profit of Rs 942.40 crore in the same quarter last fiscal.

The Nifty closed below the psychological support of 5,200 and near its 20-day moving average on Monday as profit booking intensified in technology, metals, realty and capital goods sectors in last one hour of trade.

"The Nifty is now expected to head lower till 5166 with resistance around 5221 in the short term. A key support in the immediate run would be around 5166," Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan, said.

"The Nifty has broken the previous low ie 5257 with a weekly negative close. Now the index is expected to move down till 5166 in the short term," he added.

Mehta is of the view that on the daily chart the Nifty has broken an upward sloping trend line with a bearish gap, closing below the 20-day moving average (DMA), which is a bearish sign for the market. The Nifty has crucial support around its 20-week moving average (WMA) i.e. 5164.

Overnight, US stocks fell on Monday after macro economic data showed an unexpected decline in retail sales for the month of June.

"The drop in retail sales, the third consecutive monthly decrease, contrasted with economists' expectations for a small increase and was the latest sign the recovery is flagging," Reuters reported.

The Dow Jones industrial average fell 49.88 points, or 0.39 percent, to 12,727.21. The S&P 500 Index dropped 3.14 points, or 0.23 percent, to 1,353.64. The Nasdaq Composite lost 11.53 points, or 0.40 percent, to 2,896.94.

Asian shares were trading mixed on Tuesday ahead of Federal Reserve meet later in the day while hopes of further stimulus measures from major central banks help limit losses after IMF slashed its global growth forecast.

"The pressure on the U.S. may get stronger after the International Monetary Fund on Monday cut its global growth forecast and warned of a dimming outlook if European policymakers do not act forcibly and promptly to quell their region's debt crisis," the report added.

Oil retreated after gaining over $1 on Monday, with U.S. oil down 0.3 percent at $88.14 a barrel.